We have continued our studies of chromatin structure in the neighborhood of expressed genes. The globin gene family in chicken erythroid cells serves as a model system in which it is possible to study the mechanisms associated with regulation of the cluster and individual members of the family during erythroid development. We have focused attention on the 1.2 kb insulator DNA sequence at the 5' end of the chicken beta-globin locus, and elements upstream of it. This insulator is capable both of blocking the influence of outside enhancers and of preventing the encroachment of condensed chromatin that might shut down expression of the entire region. We have shown previously that enhancer blocking activity is associated with binding of a single protein, CTCF, to a site within the enhancer. In recent studies we have extended our search for other sites of enhancer blocking activity to the mouse T cell receptor alpha/delta locus. Work in other laboratories had shown that sequences with enhancer blocking activity existed between this locus and the downstream Dad I gene, probably to prevent cross talk between the two gene regulatory systems. We showed that a single strong binding site for CTCF is present in this region, and that it has the expected enhancer blocking activity. Although there are no other such sites in the region, other sequence elements have insulator activity, pointing to the existence of novel mechanisms not previously recognized. In other work, we showed that CTCF sites are tethered to the nuclear matrix fraction, consistent with earlier results from our laboratory that point to a tethering mechanism for this insulator?s action. The insulator also has the separate ability to protect against position effects reporter genes that are stably transfected into cell lines or animals, serving as a boundary against encroachment of condensed chromatin. We found that this protective ability is present in a ?core' element, 250 bp long, from within the 1.2 kb insulator, and that deletion of subregions within the core that contain the CTCF site do not affect activity. However four other subregions corresponding to binding sites for nuclear proteins are important for position effect protection (boundary function). We have now shown that one of these binding sites is specifically responsible for maintaining a high level of histone acetylation and methylation at sites associated with gene activation. This site binds a heterodimer of the proteins USF1and USF2. These results are consistent with a model we have proposed in which barrier function is connected with multiple histone modifications in the neighborhood of the insulator. In an effort to understand how the USF proteins mediate this action, we have investigated what co-factors are recruited by USF1, both by chromatin immunoprecipitation in vivo and by co-precipitation in vitro. We identified enzymes responsible for such ?activating? histone modifications as histone acetylation and histone H3 lysine 4 methylation. In addition, we detected a strong interaction with PRMT1, the enzyme responsible for methylating arginine 3 on histone H4. This is another mark associated with transcriptionally active chromatin. We used RNAi methods to generate stable cells lines with depleted amounts of PRMT1. Not only was methylation of the arginine residue severely down-regulated as expected, but acetylation of both H3 and H4 was also strongly inhibited. We used chromatin and extracts purified from these cells to show that the effect was direct, i.e. methylation of H4Arg3 was not only necessary but also sufficient to allow histone acetylation. This is an important new example of a ?cascade? in which prior modification of Arg3 is required before the other modifications can occur. It points the way to a better understanding of the epigenetic mechanisms that help regulate gene expression.